A definitive feasibility study (DFS) is the cornerstone of a mining project’s development. It evaluates a project’s viability before any commercial bank financing is raised and serves as a comprehensive roadmap for execution.
A robust DFS demonstrates that a project is technically sound, economically viable, and ready for investment.
Success at this stage requires more than geological data; it demands strategic thinking, credibility, and a flawless execution plan with the right development partners. The quality of a DFS can determine whether a project secures the necessary capital and regulatory approvals.
A DFS without a funding plan is technically possible – but at best, theoretical. Mining projects require substantial capital, and investors want clarity on how that capital will be raised – whether through equity, debt, streaming, or partnerships.
Continuous early engagement with funders during the DFS process transforms a DFS from a concept into a bankable proposition.
It should never be treated as a tick-box exercise. Equally critical is the early involvement of an experienced EPC/M (engineering, procurement & construction management) contractor, whose real-world execution expertise elevates the DFS from a technical study to a commercially viable development plan.
By collaborating early with funders and EPC/M contractors, project promoters create a feedback loop aligning technical feasibility with financial structuring and execution capability. Funders and investors require assurance that all critical aspects have been addressed. Without a well-structured DFS, obtaining funding and final permits becomes nearly impossible, rendering the project unviable before any groundwork begins.
Environmental, social, and governance (ESG) factors have evolved from compliance checklists into strategic imperatives. A credible ESG framework includes detailed environmental impact assessments, transparent governance structures, and meaningful community engagement.
Funders increasingly demand evidence of this engagement, and projects that ignore local communities and partners risk delays, opposition, and reputational damage. Those who sincerely embrace ESG factors attract green financing, lower-cost capital, and long-term stakeholder support.
Cost overruns are frequently blamed on bad luck, but usually stem from poor planning. The real culprits are incomplete scope definition, optimistic cost and timing assumptions, and weak risk management. A DFS that aligns technical and commercial factors anticipates these challenges and incorporates the necessary contingencies and risk mitigants.
Offtake agreements can enhance bankability – but only if the terms are transparent and the counterparty is credible. However, these agreements should not be finalised in isolation. Early discussions with financiers are essential to ensure that offtake structures align with broader financing strategies.
Poorly structured deals, especially those signed without input from potential funders, can become liabilities if they constrain flexibility or conflict with debt covenants or overall capital structuring. Engaging financiers before committing to offtake terms helps prevent misalignment and strengthens the project’s commercial viability.
Commercial banks like Nedbank Corporate and Investment Banking (CIB) are pivotal in shaping commercially viable DFS documents. Nedbank CIB’s deep understanding of the mining development cycle and willingness to engage companies early in the DFS stage create a strong platform for project development success in Africa.
Cathy Nader is the principal of Mining and Critical Minerals at Nedbank CIB.
Brought to you by Nedbank CIB.
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